A last-minute dispute between the record company and Fame Bureau auctioneers almost prevented its sale.

But EMI withdrew their legal challenge and the tape was sold to a Japanese collector at the weekend.

It is thought the Beatles' manager Brian Epstein held on to the tape he had paid to make and later gave it to an executive associated with EMI. He sold it in 2002 to a prolific buyer of music memorabilia.

At the time of the recording Epstein had visited several record companies with the hope of securing a contract for the Beatles.

On New Year's Eve 1961 the band were driven from Liverpool to London but ended up taking 10 hours to get there as the driver got lost.

The following day they were auditioned by Decca producer Tony Meehan.

Epstein selected the material and chose 10 cover songs the Beatles had previously performed in various clubs, along with three of their own songs.

But the band failed to impress Decca executive Dick Rowe who turned them down, believing "guitar groups are on the way out".

The 10 tracks on the 12 inch audio tape include Money (That's What I Want), Like Dreamers Do, Take Good Care of my Baby, Three Cool Cats, Love of the Loved, Memphis and Crying Waiting Hoping.

A handwritten note stuck on the cover for the tape lists the 10 songs and their length.

There is also a photo negative of Paul McCartney, John Lennon, George Harrison and Pete Best that they took with them to the audition and would have been used as the album cover had they won the contract.

Ted Owen, of auctioneers the Fame Bureau, said: "There was a problem and EMI challenged us over selling the tape but they had no grounds.

"It has all been settled now and we are comfortable with each other. The tape has never officially been released. It is totally unique and the sound quality is crystal clear."

The tape went to a Capitol Records executive after the Beatles signed with EMI, he added.

"He sold it to the current owner who was one of the top buyers for Hard Rock Cafe but it was for his own personal collection," he said.

"We have spoken to various experts and this is the best quality recording of this session there is given that it is the master copy.

"The songs on it are all covers from mainly American artists and the Beatles actually sound American in a lot of the songs.

"They are copying the American style, the style of artists like Buddy Holly and Chuck Berry.

"EMI took them in the end and the rest is history. After that they were massive."

Instead of the Beatles, Decca Records signed up the Tremeloes, who auditioned the same day. They did later go on to sign the Rolling Stones.

Within weeks after signing with EMI, it was decided to replace drummer Pete Best with Ringo Star.

Bill Heckle, the co-owner of The Cavern Club in Liverpool, said: "This was always a big, big deal for Beatles fans.

"It was a great album. It was the one that failed the audition but it is such a historical document.